A central bank digital currency, or CBDC, is a digital form of a country's official money, issued directly by its central bank. The Federal Reserve describes it as "a digital liability of a central bank that is widely available to the general public." Unlike the money in your bank account, which is a claim on a private bank, a CBDC would be central bank money in digital form, the same way physical cash is today. The United States has not issued one, and current law blocks the Fed from doing so.

What a CBDC is, and how it differs from the money you already use

Almost all the money you spend already is digital: the balance in your checking account is a number on a bank's computer. The difference is who stands behind it. That balance is a liability of a commercial bank, protected up to limits by deposit insurance. A CBDC would instead be a liability of the central bank itself, carrying no credit risk from a private firm, exactly like a banknote but electronic.

That also sets it apart from a stablecoin, which is issued by a private company and is only as sound as the reserves behind it. A CBDC is base money issued by the state. It is a different thing from cryptocurrencies such as Bitcoin, too, because it is centralized, official, and not meant to float in value.

Retail versus wholesale

There are two broad designs, and they are not the same project. A retail CBDC would be available to the general public for everyday payments, the digital equivalent of cash in your pocket. A wholesale CBDC would be available only to banks and financial institutions for large-value settlement between them. The distinction matters because the wholesale version changes far less: interbank payment systems are already digital, so a wholesale CBDC is closer to an upgrade of existing plumbing, while a retail CBDC raises much bigger questions about privacy, the role of banks, and who holds accounts at the central bank.

Where the United States actually stands

The Federal Reserve has not issued a CBDC, and it has said it would not do so without authorization. Its 2022 discussion paper, in its own words, "does not favor any policy outcome" and was only "the first step in a discussion of whether and how a CBDC could improve the safe and efficient domestic payments system."

Since then the politics have hardened against a US retail digital dollar. According to a Congressional Research Service report dated July 15, 2026, Title XI of the 21st Century ROAD to Housing Act (Public Law 119-101) "temporarily prohibits the Fed from issuing a CBDC through 2030." The CRS adds that Executive Order 14178, signed in January 2025, bars federal agencies from "undertaking any action to establish, issue, or promote CBDCs," and that three separate bills in Congress would make the ban permanent. In short, a US retail CBDC is not merely unbuilt; it is currently against the law for the Fed to issue one, at least through 2030.

Wholesale research is a different matter. The New York Fed has continued to study wholesale and cross-border settlement, including an international experiment known as Project Agora, which is distinct from any plan to put a digital dollar in consumers' hands.

The rest of the world has moved faster

The US is unusual among large economies in stepping back. The Atlantic Council's CBDC tracker, updated in May 2026, counts 146 countries and currency unions exploring a CBDC, together representing more than 98% of global GDP, with 77 of them in an advanced stage of development, pilot, or launch. Three have fully launched a retail CBDC so far: the Bahamas, Jamaica, and Nigeria. The tracker calls the US "an outlier among its peers" and notes it is the only G20 member not actively exploring one.

The most watched large project is China's e-CNY, a retail digital yuan that has run in extensive pilots. Several advanced economies, including the euro area and the United Kingdom, have been studying retail CBDCs without committing to launch.

What a digital dollar would, and would not, change

It helps to be concrete about the stakes. A retail CBDC would not replace your bank account overnight or ban cash; most proposals envisage it sitting alongside both. What it could change is the plumbing: payments that settle instantly and at very low cost, and a form of digital money with no credit risk. The flip side is what critics fear. If households could hold money directly at the central bank, they might pull deposits out of commercial banks, especially in a crisis, which could make funding scarcer for lending. And a government-issued digital currency, depending on its design, could create a record of transactions that cash does not. Those two concerns, the effect on bank deposits and on privacy, sit at the heart of the US debate.

Why people argue about it

Supporters say a CBDC could make payments faster and cheaper, reach people without bank accounts, and give the public a digital form of money with no credit risk as cash use declines. Critics, including many US lawmakers, worry a government-issued digital currency could let the state see or control how citizens spend, could drain deposits out of commercial banks in a crisis, and is unnecessary now that private instant-payment systems and the Fed's own FedNow service, launched in 2023, already move money quickly.

For an ordinary reader, the bottom line is simple. A CBDC is official digital money, not a crypto investment and not a product you can buy. In the United States there is no digital dollar, and by law the Fed cannot issue one through 2030, so the live debate is about whether that should ever change, not about something arriving soon. The broader shift toward digital money, from instant payments to private stablecoins, is covered in our explainer on what fintech is and how it is changing money.